This article first appeared in The Edge Malaysia Weekly on April 25, 2022 - May 1, 2022

TAN Sri Md Nor Yusof, former chairman of CIMB Group Holdings Bhd, is likely to be appointed chairman of AMMB Holdings Bhd, sources familiar with the matter tell The Edge.

It is understood that Md Nor will be taking over from substantial shareholder and long-serving chairman Tan Sri Azman Hashim, who is 82 and looking to relinquish his position.

“Expect an announcement [on Md Nor’s appointment] later this week,” says a source, declining to elaborate.

It is also learnt that the requisite approvals from the central bank, Bank Negara Malaysia, have already been obtained for Md Nor’s appointment.

Md Nor has extensive corporate experience. Apart from being chairman of CIMB Group Holdings Bhd, he was president and CEO of Bank of Commerce (M) Bhd (which morphed into CIMB); served on the board of sovereign wealth fund Khazanah Nasional Bhd (also CIMB’s parent) as director and chairman of the executive committee; was executive chairman of regulator Securities Commission Malaysia; and was managing director of national carrier Malaysian Airline System Bhd after a period of service as an adviser to the Ministry of Finance. He has also been on the board of companies and outfits such as Malaysian Agrifood Corp Bhd and Pelaburan Hartanah Bumiputera Bhd, and is a trustee of the CIMB Foundation.

“He is a respected old hand in corporate Malaysia … a perfect candidate to take over from Azman,” says another source familiar with his appointment to AMMB.

While news of Md Nor’s appointment has just hit the market, talk is already rife as to what the appointment may entail and what else may be in the pipeline at AMMB.

Yet another source says: “It may set the stage for more corporate exercises at the bank. Md Nor is a well-known figure in the corporate world. I think his last major posting was as chairman of Lembaga Tabung Haji between July 2018 and October last year.

“Md Nor replacing Azman could be a precursor to more corporate exercises at AMMB. There has, after all, been a lot of interest in AMMB as an acquisition target or to be merged with another bank, as both Azman and ANZ (Australia and New Zealand Banking Group Ltd) are known to be looking to exit.”

ANZ is the largest shareholder at AMMB, with a 21.68% stake; Azman has the second-largest stake, controlling 11.83% equity interest. The other substantial shareholder at AMMB is the Employees Provident Fund (EPF), which has a 9.62% stake.

For the longest time, AMMB has been the subject of a rumoured merger and acquisition with the EPF-controlled RHB Bank Bhd. In June 2017, AMMB was in merger talks with RHB for the latter to take over the assets and liabilities of AmBank Bhd, the banking arm of AMMB, in an all-share deal. The plan was terminated in August that year, however, as the two banking groups were unable to reach an agreement on mutually acceptable terms and conditions.

At the time, market talk was that, during the due diligence process, RHB had found large contingent liabilities in AmBank related to 1Malaysia Development Bhd (1MDB).

While AMMB initially denied this, in February 2021, the bank entered into a global settlement with the Malaysian government involving a payment of RM2.83 billion for the group’s involvement in the 1MDB scandal.

Now that these issues are out of the way, potential suitors could be looking at AMMB.

In looking to dispose of its stake in AMMB, ANZ has indicated that it would write down the value of its investment in it, following the 1MDB settlement.

Back then, when the proposed RHB-AMMB merger was still on the table, Credit Suisse had said in a report that the merger would be value-accretive and could materially lift the estimated return on equity and fair value of a post-merger enlarged entity. It said the merged entity would have an estimated domestic loan market share of 16% and rank third in the country. RHB is currently a distant fourth, with a 10.2% share of the domestic loan market.

RHB’s largest shareholders are the EPF, which holds a 42.2% stake, and OSK Holdings Bhd, with a 10.18% interest.

There has also been talk that CIMB and even the largest lender Malayan Banking Bhd are interested, but it has never been substantiated. Talk of foreign firms looking at AMMB was deemed conjecture at press time.

It is also noteworthy that AMMB has on its own been undertaking corporate exercises and is selling its entire stake in AmGeneral Insurance Bhd to Liberty Insurance Bhd for RM2.29 billion, to be satisfied via cash and a 30% stake in the latter.

AMMB closed last Friday at RM3.71, valuing the group at RM12.28 billion. Over the last one year, the counter has risen more than 23%.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.